Documentos de Académico
Documentos de Profesional
Documentos de Cultura
Event Description:
2014-02-26
Depublication request denied (case closed)
O PI N I O N
INTRODUC TI ON
Before Washington Mutual Bank, FA (WaMu) was seized by federal banking
regulators in 2008, it made many residential real estate loans and used those loans as
collateral for mortgage-backed securities.1 Many of the loans went into default, which
led to nonjudicial foreclosure proceedings. Some of the foreclosures generated lawsuits,
which raised a wide variety of claims. The allegations that the instant case shares with
some of the other lawsuits are that (1) documents related to the foreclosure contained
forged signatures of Deborah Brignac and (2) the foreclosing entity was not the true
owner of the loan because its chain of ownership had been broken by a defective transfer
of the loan to the securitized trust established for the mortgage-backed securities. Here,
the specific defect alleged is that the attempted transfers were made after the closing date
of the securitized trust holding the pooled mortgages and therefore the transfers were
ineffective.
In this appeal, the borrower contends the trial court erred by sustaining
GHIHQGDQWVGHPXUUHUDVWRDOORIKLVFDXVHVRIDFWLRQDWWDFNLQJWKHQRQMXGLFLDO
IRUHFORVXUH:HFRQFOXGHWKDWDOWKRXJKWKHERUURZHUVDOOHJDWLRQVDUHVRPHZKDW
confusing and may contain contradictions, he nonetheless has stated a wrongful
1
foreclosure claim under the lenient standards applied to demurrers. We conclude that a
ERUURZHUPD\FKDOOHQJHWKHVHFXULWL]HGWUXVWVFKDLQRIRZQHUVKLSE\DOOHJLQJWKH
attempts to transfer the deed of trust to the securitized trust (which was formed under
1HZ<RUNODZRFFXUUHGDIWHUWKHWUXVWVFORVLQJGDWH7UDQVIHUVWKDWYLRODWHWKHWHUPVRI
the trust instrument are void under New York trust law, and borrowers have standing to
challenge void assignments of their loans even though they are not a party to, or a third
party beneficiary of, the assignment agreement.
We therefore reverse the judgment of dismissal and remand for further
proceedings.
F A C TS
The Loan
Thomas A. Glaski, a resident of Fresno County, is the plaintiff and appellant in
this lawsuit. The operative second amended complaint (SAC) alleges the following:
In July 2005, Glaski purchased a home in Fresno for $812,000 (the Property). To
finance the purchase, Glaski obtained a $650,000 loan from WaMu. Initial monthly
payments were approximately $1,700. Glaski executed a promissory note and a deed of
trust that granted WaMu a security interest in the Property (the Glaski deed of trust).
Both documents were dated July 6, 2005. The Glaski deed of trust identified WaMu as
the lender and the beneficiary, defendant California Reconveyance Company (California
Reconveyance) as the trustee, and Glaski as the borrower.
Paragraph 20 of the Glaski deed of trust contained the traditional terms of a deed
of trust and states that the note, together with the deed of trust, can be sold one or more
times without prior notice to the borrower. In this case, a number of transfers purportedly
RFFXUUHG7KHYDOLGLW\RIDWWHPSWVWRWUDQVIHU*ODVNLVQRWHDQGGHHGRIWUXVWWRD
securitized trust is a fundamental issue in this appeal.
&LYLO&RGHVHFWLRQVXEGLYLVLRQDVWDWHVWKDWDWUXVWHHPRUWJDJHHRU
benefiFLDU\RUDQ\RIWKHLUDXWKRUL]HGDJHQWVPD\LQLWLDWHWKHQRQMXGLFLDOIRUHFORVXUH
process. This statute and the provision of the Glaski deed of trust are the basis for
*ODVNLVSRVLWLRQWKDWWKHQRQMXGLFLDOIRUHFORVXUHLQWKLVFDVHZDVwrongful namely, that
the power of sale in the Glaski deed of trust was invoked by an entity that was not the
true beneficiary.
3
*ODVNLVSOHDGLQJGRHVQRWDOOHJHWKDW/D6DOOH%DQNZDVWKHRULJLQDOWUXVWHH
when the WaMu Securitized Trust was formed in late 2005, but filings with the Securities
and Exchange Commission identify LaSalle Bank as the original trustee. We provide this
4
continuing duties other than to hold assets and to issue various series of certificates of
investment. A description of the certificates of investment as well as the categories of
mortgage loans is included in the prospectus filed with the Securities and Exchange
Commission (SEC) on October 21, 2005. Glaski alleges that the investment certificates
issued by the WaMu Securitized Trust were duly registered with the SEC.
The closing date for the WaMu Securitized Trust was December 21, 2005, or 90
days thereafter. Glaski alleges that the attempt to assign his note and deed of trust to the
WaMu Securitized Trust was made after the closing date and, therefore, the assignment
was ineffective. (See fn. 12, post.)
:D0XV)DLOXUHDQG7UDQVIHUVRIWKH/RDQ
In September 2008, WaMu was seized by the Office of Thrift Supervision and the
Federal Deposit Insurance Corporation (FDIC) was appointed as a receiver for WaMu.
That same day, the FDIC, in its capacity as receiver, sold the assets and liabilities of
WaMu to defendant JPMorgan Chase Bank, N.A., (JP Morgan). This transaction was
GRFXPHQWHGE\D385&+$6($1'$668037,21$*5((0(17:+2/(%$1.
(boldface and underlining omitted) between the FDIC and JP Morgan dated as of
6HSWHPEHU,I*ODVNLVORDQZDVQRWYDOLGO\WUDQVIHUUHGWRWKH:D0X
Securitized Trust, it is possible, though not certain, that JP Morgan acquired the Glaski
deed of trust when it purchased WaMu assets from the FDIC.4 JP Morgan also might
have acquired the right to service the loans held by the WaMu Securitized Trust.
information for background purposes only and it plays no role in our decision in this
appeal.
4
One controversy presented by this appeal is whether this court should consider
the December 9, 2008, assignment of deed of trust, which is not an exhibit to the SAC.
Because the trial court took judicial notice of the existence and recordation of the
assignment earlier in the litigation, we too will consider the assignment, but will not
presume the matters stated therein are true. (See pt. IV.B, post.) For instance, we will
not assume that JP Morgan actually held any interests that it could assign to LaSalle
Bank. (See Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366,
>WDNLQJMXGLFLDOQRWLFHRIDUHFRUGHGDVVLJQPHQWGRHVQRWHVWDEOLVKDVVLJQHHV
ownership of deed of trust].)
7
Specifically, the notice stated that his August 2008 installment payment and all
subsequent installment payments had not been made.
6
7KH12'DOVRVWDWHGWKDWWKHSUHVHQWEHQHILFLDU\XQGHUWKH*ODVNLGHHGRIWUXVWKDG
delivered to the trustee a written declaration and demand for sale. According to the
NOD, all sums secured by the deed of trust had been declared immediately due and
payable and that the beneficiary elected to cause the Property to be sold to satisfy that
obligation.
The NOD stated the amount of past due payments was $11,200.78 as of December
8, 2008.8 ,WDOVRVWDWHG7RILQGRXWWKHDPRXQW\RXPXVWSD\RUWRDUUDQJHIRUSD\PHQW
WRVWRSWKHIRUHFORVXUHFRQWDFW-30RUJDQ&KDVH%DQN1DWLRQDO$VVRFLDWLRQDW
BAYMEADOWS WAY, JACKSONVILLE, FL 32256, (877) 926-
Approximately three months after the NOD was recorded and served, the next
official step in the nonjudicial foreclosure process occurred. On March 12, 2009, a
127,&(2)75867((66$/(ZDVUHFRUGHGE\WKH)UHVQR&RXQW\5HFRUGHUQotice
of sale). The sale was scheduled for April 1, 2009. The notice stated that Glaski was in
default under his deed of trust and estimated the amount owed at $734,115.10.
The notice of sale indicated it was signed on March 10, 2009, by Deborah
Brignac, as Vice President for California Reconveyance*ODVNLDOOHJHVWKDW%ULJQDFV
VLJQDWXUHZDVIRUJHGWRHIIHFWXDWHDIUDXGXOHQWIRUHFORVXUHDQGWUXVWHHVVDOHRIKLV
primary residence.
Glaski alleges that from March until May 2009, he was led to believe by his
negotiations with Chase that a loan modification was in process with JP Morgan.
8
The signature block at the end of the NOD indicated it was signed by Colleen
Irby as assistant secretary for California Reconveyance. The first page of the notice
stated that recording was requested by California Reconveyance. Affidavits of mailing
attached to the SAC stated that the declarant mailed copies of the notice of default to
Glaski at his home address and to Bank of America, care of Custom Recording Solutions,
at an address in Santa Ana, California. The affidavits of mailing are the earliest
documents in the appellate record indicating that Bank of America had any involvement
ZLWK*ODVNLVORDQ
7
JP Morgan*ODVNLDOOHJHVWKDW%ULJQDFVVLJQDWXUHZDVIRUJHG
The very next document filed by the Fresno County Recorder on June 15, 2009,
ZDVD75867((6'(('83216$/(%ROGIDFHRPLWWHG7KHWUXVWHHVGHHGXSRQ
sale stated that California Reconveyance, as the duly appointed trustee under the Glaski
deed of trust, granted and conveyed to Bank of America, as successor by merger to La
Salle NA as trustee for the WaMu Securitized Trust, all of its right, title and interest to
WKH3URSHUW\7KHWUXVWHHVGHHGXSRQVDOHVWDWHGWKDWWKHDPRXQWRIWKHXQSDLGGHEWDQG
FRVWVZDVDQGWKDWWKHJUDQWHHSDLGDWWKHWUXVWHHVVDOHHLWKHULQ
lawful money or by credit bid.
PR O C E E D I N GS
In October 2009, Glaski filed his original complaint. In August 2011, Glaski filed
the SAC, which alleged the following numbered causes of action:
(1) Fraud against JPMorgan and California Reconveyance for the alleged forged
signatures of Deborah Brignac as vice president for California Reconveyance and then as
vice president of JPMorgan;
(2) Fraud against all defendants for their failure to timely and properly transfer the
Glaski loan to the WaMu Securitized Trust and their representations to the contrary;
(3) Quiet title against Bank of America, Chase, and California Reconveyance
based on the broken chain of title caused by the defective transfer of the loan to the
WaMu Securitized Trust;
(4) Wrongful foreclosure against all defendants, based on the forged signatures of
Deborah Brignac and the failure to timely and properly transfer the Glaski loan to the
WaMu Securitized Trust;
(5) Declaratory relief against all defendants, based on the above acts by
defendants;
(8) Cancellation of various foreclosure documents against all defendants, based on
the above acts by the defendants; and
(9) Unfair practices under California Business and Professions Code section
17200, et seq., against all defendants.
Among other things, Glaski raised questions regarding the chain of ownership, by
contending that the defendants were not the lender or beneficiary under his deed of trust
and, therefore, did not have the authority to foreclose.
In September 2011, defendants filed a demurrer that challenged each cause of
action in the SAC on the grounds that it failed to state facts sufficient to constitute a
claim for relief. With respect to the wrongful foreclosure cause of action, defendants
argued that Glaski failed to allege (1) any procedural irregularity that would justify
VHWWLQJDVLGHWKHSUHVXPSWLYHO\YDOLGWUXVWHHVVDOHDQGWKDWKHFRXOGWHQGHUWKH
DPRXQWRZHGLIWKHWUXVWHHVVDOHZHUHVHWDVLGH
9
To support their demurrer to the SAC, defendants filed a request for judicial notice
concerning (1) Order No. 2008-36 of the Office of Thrift Supervision, dated September
25, 2008, appointing the FDIC as receiver of Washington Mutual Bank and (2) the
Purchase and Assumption Agreement Whole Bank between the FDIC and JP Morgan
dated as of September 25, 2008, concerning the assets, deposits and liabilities of
Washington Mutual Bank.10
Glaski opposed the demurrer, arguing that breaks in the chain of ownership of his
GHHGRIWUXVWZHUHVXIILFLHQWO\DOOHJHG+HDVVHUWHGWKDW%ULJQDFs signature was forged
and the assignment bearing that forgery was void. His opposition also provided a more
detailed explanation of his argument that his deed of trust had not been effectively
transferred to the WaMu Securitized Trust that held the pool of mortgage loans. Thus, in
*ODVNLVYLHZ%DQNRI$PHULFDVFODLPDVWKHVXFFHVVRUWUXVWHHLVIODZHGEHFDXVHWKH
trust never held his loan.
On November 15, 2011, the trial court heard argument from counsel regarding the
demurrer. Counsel for Glaski argued, among other things, that the possible ratification of
the allegedly forged signatures of Brignac presented an issue of fact that could not be
resolved at the pleading stage.
Later that day, the court filed a minute order adopting its tentative ruling. As
EDFNJURXQGIRUWKHLVVXHVSUHVHQWHGLQWKLVDSSHDOZHZLOOGHVFULEHWKHWULDOFRXUWVUXOLQJ
RQ*ODVNLVWZRIUDXGFDXVHVRIDFWLRQDQGKLVZURQJIXOIRUHFORVXUHFDXVHRIDFWLRQ
The ruling stated that the first cause of action for fraud was based on an allegation
that defendants misrepresented material information by causing a forged signature to be
10
placed on the June 2009 assignment of deed of trust. The ruling stated that if the
VLJQDWXUHRI%ULJQDFZDVIRUJHG&DOLIRUQLD5HFRQYH\DQFHUDWLILHGthe signature by
WUHDWLQJLWDVYDOLG$VDQDGGLWLRQDOUDWLRQDOHWKHUXOLQJFLWHG Gomes v. Countrywide
Home Loans, Inc. (2011) 192 Cal.App.4th 1149 ( Gomes) for the proposition that the
H[KDXVWLYHQDWXUHRI&DOLIRUQLDVQRQMXGLFLDOIRUHFORVXUHVFKHPHSUohibited the
LQWURGXFWLRQRIDGGLWLRQDOUHTXLUHPHQWVFKDOOHQJLQJWKHDXWKRULW\RIWKHOHQGHUVQRPLQHH
to initiate nonjudicial foreclosure.
As to the second cause of action for fraud, the ruling noted the allegation that the
Glaski deed of trust was tranVIHUUHGWRWKH:D0X6HFXULWL]HG7UXVWDIWHUWKHWUXVWV
closing date and summarized the claim as asserting that the Glaski deed of trust had been
improperly transferred and, therefore, the assignment was void ab initio. The ruling
rejected this claim, staWLQJ>7@RUHLWHUDWH Gomes v. Countrywide, supra holds that there
is no legal basis to challenge the authority of the trustee, mortgagee, beneficiary, or any
of their authorized agents to initiate the foreclosure process citing Civil Code 2924,
subd. D
The ruling stated that the fourth cause of action for wrongful foreclosure was
EDVHGXSRQWKHLQYDOLGLW\RIWKHIRUHFORVXUHVDOHFRQGXFWHGRQ0D\GXHWRWKH
IRUJHGVLJQDWXUHRI'HERUDK%ULJQDFDQGWKHIDLOXUHRI'HIHQGDQWVWRSURYLGe a chain
RIWLWOHRIWKHQRWHDQGWKHPRUWJDJH7KHUXOLQJVWDWHGWKDWDVH[SODLQHGHDUOLHUWKHVH
FRQWHQWLRQVDUHPHULWOHVVDQGVXVWDLQHGWKHJHQHUDOGHPXUUHUWRWKHZURQJIXOIRUHFORVXUH
claim without leave to amend.
Subsequently, a judgment of dismissal was entered and Glaski filed a notice of
appeal.
11
D ISC USSI O N
I.
STANDARD OF REVIEW
7KHWULDOFRXUWVXVWDLQHGWKHGHPXUUHUWRWKH6$&RQWKHJURXQGWKDWLWGLGQRW
County of Tulare (2007) 41 Cal.4th 859, 865.) Our consideration of the facts alleged
LQFOXGHVWKRVHHYLGHQWLDU\IDFWVIRXQGLQUHFLWDOVRIH[KLELWVDWWDFKHGWRDFRPSODLQW
(Satten v. Webb &DO$SSWK:HDOVRFRQVLGHUPDWWHUVZKLFKPD\
EHMXGLFLDOO\QRWLFHGSerrano v. Priest (1971) 5 Cal.3d 584, 591; see Code Civ. Proc.,
430.30, subd. (a) [use of judicial notice with demurrer].) Courts can take judicial notice
of the existence, content and authenticity of public records and other specified
documents, but do not take judicial notice of the truth of the factual matters asserted in
those documents. (Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063,
overruled on other grounds in In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1262.)
:HQRWHLQSDVVLQJXSRQWKHTXHVWLRQRIWKHVXIILFLHQF\RULQVXIILFLHQF\RID
complaint to state a cause of action, it is wholly beyond the scope of the inquiry to
DVFHUWDLQZKHWKHUWKHIDFWVVWDWHGDUHWUXHRUXQWUXHDV>W@KDWLVDOZD\VWKHXOWLPDWH
TXHVWLRQWREHGHWHUPLQHGE\WKHHYLGHQFHXSRQDWULDORIWKHTXHVWLRQVRIIDFW Colm v.
II.
FRAUD
A.
The elements of a fraud cause of action are (1) misrepresentation, (2) knowledge
of the falsity or scienter, (3) intent to defraudthat is, induce reliance, (4) justifiable
reliance, and (5) resulting damages. ( Lazar v. Superior Court (1996) 12 Cal.4th 631,
638.) These elements may not be pleaded in a general or conclusory fashion. ( Id. at p.
645.) Fraud must be pled specificallythat is, a plaintiff must plead facts that show with
particularity the elements of the cause of action. ( Ibid.)
In their demurrer, defendants contended facts establishing detrimental reliance
were not alleged.
B.
13
complaint had jumbled together many different statutes and theories of liability and
GLUHFWHG*ODVNLWRDYRLGFKDLQOHWWHUDOOHJDWLRQVLQKLVDPHQGHGSOHDGLQJ
*ODVNLVIirst amended complaint set forth two fraud causes of action that are
similar to those included in the SAC.
'HIHQGDQWVGHPXUUHGWRWKHILUVWDPHQGHGFRPSODLQW7KHWULDOFRXUWVPLQXWH
RUGHUVWDWHV3ODLQWLIILVDGYLVHGfor the last time to plead each cause of action such that
only the essential elements for the claim are set forth without reincorporation of lengthy
JHQHUDODOOHJDWLRQV,QRWKHUZRUGVWKHIDFWVWREHSOHDGHGDUHWKRVHXSRQZKLFK
OLDELOLW\GHSHQGVLHWKHIDFWVFRQVWLWXWLQJWKHFDXVHRIDFWLRQ
After Glaski filed his SAC, defendants filed a demurrer. Glaski then filed an
opposition that asserted he had properly alleged detrimental reliance. He did not argue he
could amend to allege specifically the action he took or did not take because of his
reliance on the alleged forgeries.
Accordingly, Glaski failed to carry his burden of demonstrating he could allege
with the requisite specificity the elements of justifiable reliance and damages resulting
from that reliance. (See Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [the burden of
articulating how a defective pleading could be cured is squarely on the plaintiff].)
Therefore, we conclude that the trial court did not abuse its discretion when it denied
leave to amend as to the 6$&VILUVWFDXVHRIDFWLRQIRUIUDXG
C.
*ODVNLVVHFRQGFDXVHRIDFWLRQIRUIUDXGDOOHJHGWKDW:D0XIDLOHGWRWUDQVIHUKLV
note and deed of trust into the WaMu Securitized Trust back in 2005. Glaski further
DOOHJHGLQHVVHQFHWKDWGHIHQGDQWVDWWHPSWHGWRUHFWLI\:D0XVIDLOXUHE\HQJDJLQJLQD
fraudulent scheme to assign his note and deed of trust into the WaMu Securitized Trust.
The scheme was implemented in 2008 and 2009 and its purpose was to enable defendants
to fraudulently foreclosure against the Property.
14
The second cause of action for fraud attempts to allege detrimental reliance in the
IROORZLQJVHQWHQFH'HIHQGDQWVDQGHDFKRIWKHPDOVRNQHZWKDWWKHDFWRIUHFRUGLQg
the Assignment of Deed of trust without the authorization to do so would cause Plaintiff
to rely XSRQ'HIHQGDQWVDFWLRQV by attempting to negotiate a loan modification with
UHSUHVHQWDWLYHVRI&KDVH+RPH)LQDQFH//&DJHQWVRI-3025*$17KHDVVLJQPHQt
mentioned in this allegation is the assignment of deed of trust recorded in June 2009no
other assignment of deed of trust is referred to in the second cause of action.
The allegation of reliance does not withstand scrutiny. The act of recording the
aOOHJHGO\IUDXGXOHQWDVVLJQPHQWRFFXUUHGLQ-XQHDIWHUWKHWUXVWHHVVDOHRIWKH
Property had been conducted. If Glaski was induced to negotiate a loan modification at
WKDWWLPHLWLVXQFOHDUKRZQHJRWLDWLRQVRFFXUULQJDIWHUWKH0D\WUXVWHHVVale could
KDYHGLYHUWHGKLPIURPVWRSSLQJWKHWUXVWHHVVDOH7KXV*ODVNLVDOOHJDWLRQRIUHOLDQFH
is not connected to any detriment or damage.
Because Glaski has not demonstrated how this defect in his fraud allegations could
be cured by amendment, we conclude that the trial court did not abuse its discretion in
denying leave to amend the second cause of action in the SAC.
III.
*ODVNLV7KHRU\RI:URQJIXO)RUHFORVXUH
In particular, Glaski alleges that (1) the corpus of the WaMu Securitized Trust was
a pool of residential mortgage notes purportedly secured by liens on residential real
HVWDWHVHFWLRQRIWKH3RROLQJDQG6HUYLFLQJ$JUHHPHQWUHTXLUHGWKDWDOO
mortgage files transferred to the WaMu Securitized Trust be delivered to the trustee or
initial custodian of the WaMu Securitized Trust before the closing date of the trust
(which was allegedly set for December 21, 2005, or 90 days thereafter); (3) the trustee or
initial custodian was required to identify all such records as being held by or on behalf of
the :D0X6HFXULWL]HG7UXVW*ODVNLVQRWHDQGORDQZHUHQRWWUDQVIHUUHGWRWKH
WaMu Securitized Trust prior to its closing date; (5) the assignment of the Glaski deed of
trust did not occur by the closing date in December 2005; (6) the transfer to the trust
attempted by the assignment of deed of trust recorded on June 15, 2009, occurred long
after the trust was closed; and (7) the attempted assignment was ineffective as the WaMu
Securitized Trust could not have accepted the Glaski deed of trust after the closing date
because of the pooling and servicing agreement and the statutory requirements applicable
to a Real Estate Mortgage Investment Conduit (REMIC) trust.12
This allegation comports with the following view of pooling and servicing
DJUHHPHQWVDQGWKHIHGHUDOWD[FRGHSURYLVLRQVDSSOLFDEOHWR5(0,&WUXVWV2QFHWKH
bundled mortgages are given to a depositor, the [pooling and servicing agreement] and
IRS tax code provisions require that the mortgages be transferred to the trust within a
certain time frame, usually ninety dates from the date the trust is created. After such
time, the trust closes and any subsequent transfers are invalid. The reason for this is
purely economic for the trust. If the mortgages are properly transferred within the ninetyday open period, and then the trust properly closes, the trust is allowed to maintain
5(0,&WD[VWDWXV Deconstructing Securitized Trusts, supra, 41 Stetson L.Rev. at pp.
757-758.)
16
B.
The theory that a foreclosure was wrongful because it was initiated by a nonholder
of the deed of trust has also been phrased as (1) the foreclosing party lacking standing to
foreclose or (2) the chain of title relied upon by the foreclosing party containing breaks or
defects. (See Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 764;
Herrera v. Deutsche Bank National Trust Co. , supra, 196 Cal.App.4th 1366 [Deutsche
Bank not entitled to summary judgment on wrongful foreclosure claim because it failed
to show a chain of ownership that would establish it was the true beneficiary under the
deed of trust ]; Guerroro v. Greenpoint Mortgage Funding, Inc. (9th Cir. 2010) 403
Fed.Appx. 154, 156 [rejecting a wrongful foreclosure claim because, among other things,
SODLQWLIIVKDYHQRWSOHDGHGDQ\IDFWVWRUHEXWWKHXQEURNHQFKDLQRIWLWOH@
In Barrionuevo v. Chase Bank, N.A. (N.D.Cal. 2012) 885 F.Supp.2d 964, the
GLVWULFWFRXUWVWDWHG6HYHUDOFRXUWVKDYHUHFRJQL]HGWKHH[LVWHQFHRIDYDOLGFDXVHRI
action for wrongful foreclosure where a party alleged not to be the true beneficiary
LQVWUXFWVWKHWUXVWHHWRILOHD1RWLFHRI'HIDXOWDQGLQLWLDWHQRQMXGLFLDOIRUHFORVXUH Id.
at p. 973.) We agree with this statement of law, but believe that properly alleging a cause
of action under this theory requires more than simply stating that the defendant who
invoked the power of sale was not the true beneficiary under the deed of trust. Rather, a
plaintiff asserting this theory must allege facts that show the defendant who invoked the
power of sale was not the true beneficiary. (See Herrera v. F ederal National Mortgage
Assn. (2012) 205 Cal.App.4th 1495, 1506 [plaintiff failed to plead specific facts
demonstrating the transfer of the note and deed of trust were invalid].)
C.
One basis for claiming that a foreclosing party did not hold the deed of trust is that
the assignment relied upon by that party was ineffective. When a borrower asserts an
assignment was ineffective, a question ofWHQDULVHVDERXWWKHERUURZHUVVWDQGLQJWR
17
challenge the assignment of the loan (note and deed of trust)an assignment to which
the borrower is not a party. (E.g., Conlin v. Mortgage Electronic Registration Systems,
Inc. (6th Cir. 2013) 714 F.3d 355, 361 [third party may only challenge an assignment if
that challenge would render the assignment absolutely invalid or ineffective, or void];
Culhane v. Aurora Loan Services of Nebraska (1st Cir. 2013) 708 F.3d 282, 291 [under
Massachusetts law, mortgagor has standing to challenge a mortgage assignment as
invalid, ineffective or void]; Gilbert v. Chase Home F inance, LLC (E.D.Cal., May 28,
2013, No. 1:13-CV-265 AWI SKO) 2013 WL 2318890.)13
&DOLIRUQLDVYHUVLRQRIWKHSULQFLSOHFRQFHUQLQJDWKLUGSDUW\VDELOLW\Wo challenge
an assignment has been stated in a secondary authority as follows:
:KHUHDQDVVLJQPHQWLVPHUHO\YRLGDEOHDWWKHHOHFWLRQRIWKHDVVLJQRU
WKLUGSDUWLHVDQGSDUWLFXODUO\WKHREOLJRUFDQQRWVXFFHVVIXOO\FKDOOHQJH
the validity or effectiveneVVRIWKHWUDQVIHU&DO-XUG
Assignments, 43.)
This statement implies that a borrower can challenge an assignment of his or her
note and deed of trust if the defect asserted would void the assignment. (See Reinagel v.
Deutsche Bank National Trust Co. (5th Cir. 2013) ___ F.3d ___ [2013 WL 3480207 at
p. *3] [following majority rule that an obligor may raise any ground that renders the
assignment void, rather than merely voidable].) We adopt this view of the law and turn
to the question whetKHU*ODVNLVDOOHJDWLRQVKDYHSUHVHQWHGDWKHRU\XQGHUZKLFKWKH
challenged assignments are void, not merely voidable.
:HUHMHFWWKHYLHZWKDWDERUURZHUVFKDOOHQJHWRDQDVVLJQPHQWPXVWIDLORQFHLW
is determined that the borrower was not a party to, or third party beneficiary of, the
13
$OWKRXJKZHPD\QRWUHO\RQXQSXEOLVKHG&DOLIRUQLDFDVHVWKH&DOLIRUQLD
Rules of Court do not prohibit citation to unpublished federal cases, which may properly
be cited as pHUVXDVLYHDOWKRXJKQRWELQGLQJDXWKRULW\ Landm ark Screens, LLC v.
Morgan, Lewis & Bockius, LLP (2010) 183 Cal.App.4th 238, 251, fn. 6, citing Cal. Rules
of Court, rule 8.1115.)
18
DVVLJQPHQWDJUHHPHQW&DVHVDGRSWLQJWKDWSRVLWLRQSDLQWZLWKWRREURDGDEUXVK
( Culhane v. Aurora Loan Services of Nebraska , supra, 708 F.3d at p. 290.) Instead,
courts should proceed to the question whether the assignment was void.
D.
+HUHWKH6$&LQFOXGHVDEURDGDOOHJDWLRQWKDWWKH:D0X6HFXULWL]HG7UXVWGLG
QRWKDYHVWDQGLQJWRIRUHFORVXUHRQWKH3URSHUW\DV'HIHQGDQWVFDQQRWSURYLGHWKH
entiUHFKDLQRIWLWOHRIWKHQRWHDQGWKH>GHHGRIWUXVW@14
More specifically, the SAC identifies two possible chains of title under which
Bank of America, as trustee for the WaMu Securitized Trust, could claim to be the holder
of the Glaski deed of trust and alleges that each possible chain of title suffers from the
same defecta transfer that occurred after the closing date of the trust.
)LUVW*ODVNLDGGUHVVHVWKHSRVVLELOLW\WKDW%DQNRI$PHULFDVFKDLQRIWLWOHLV
based on its status as successor trustee for the WaMu Securitized Trust and (2) the Glaski
GHHGRIWUXVWEHFDPHSDUWRIWKH:D0X6HFXULWL]HG7UXVWVSURSHUW\ZKHQWKHVHFXULWL]HG
WUXVWZDVFUHDWHGLQ7KH6$&DOOHJHVWKDW:D0XGLGQRWWUDQVIHU*ODVNLVQRWHDQG
deed of trust into the WaMu Securitized Trust prior to the closing date established by the
SRROLQJDQGVHUYLFLQJDJUHHPHQW,I:D0XVDWWHPSWHGWUDQVIHUZDVYRLGWKHQ%DQNRI
America could not claim to be the holder of the Glaski deed of trust simply by virtue of
being the successor trustee of the WaMu Securitized Trust.
6HFRQG*ODVNLDGGUHVVHVWKHSRVVLELOLW\WKDW%DQNRI$PHULFDDFTXLUHG*ODVNLV
deed of trust from JP Morgan, which may have acquired it from the FDIC. Glaski
14
Although this allegation and the remainder of the SAC do not explicitly
identify the trustee of the WaMu Securitized Trust as the entity that invoked the power of
sale, it is reasonable to interpret the allegation in this manner. Such an interpretation is
FRQVLVWHQWZLWKWKHSRVLWLRQWDNHQE\*ODVNLVDWWRUQH\DWWKHKHDUing on the demurrer,
ZKHUHVKHDUJXHGWKDWWKH:D0X6HFXULWL]HG7UXVWGLGQRWREWDLQ*ODVNLVORDQDQGWKXV
was precluded from proceeding with the foreclosure.
19
15
7KHVWDWXWRU\SXUSRVHLVWRSURWHFWWUXVWEHQHILFLDULHVIURPXQDXWKRUL]HG
actions by the tUXVWHH7XUDQR3UDFWLFH&RPPHQWDULHV0F.LQQH\V&RQVROLGDWHG
Laws of New York, Book 17B, EPTL 7-2.4.)
20
We are aware that some courts have considered the role of New York law and
rejected the post-closing date theory on the grounds that the New York statute is not
interpreted literally, but treats acts in contravention of the trust instrument as merely
voidable. ( Calderon v. Bank of A merica, N.A. (W.D.Tex., Apr. 23, 2013, No. SA:12-CV00121-DAE) ___ F.Supp.2d ___, [201:/DWS
@>WUDQVIHURISODLQWLIIV
note, if it violated PSA, would merely be voidable and therefore plaintiffs do not have
standing to challenge it]; Bank of A merica National Association v. Bassman F BT, L.L.C .
(Ill.Ct.App. 2012) 981 N.E.2d 1, 8 [following cases that treat ultra vires acts as merely
voidable].)
Despite the foregoing cases, we will join those courts that have read the New York
statute literally. We recognize that a literal reading and application of the statute may not
always be appropriate because, in some contexts, a literal reading might defeat the
statutory purpose by harming, rather than protecting, the beneficiaries of the trust. In this
case, however, we believe applying the statute to void the attempted transfer is justified
because it protects the beneficiaries of the WaMu Securitized Trust from the potential
adverse tax consequence of the trust losing its status as a REMIC trust under the Internal
Revenue Code. Because the literal interpretation furthers the statutory purpose, we join
WKHSRVLWLRQVWDWHGE\D1HZ<RUNFRXUWDSSUR[LPDWHO\WZRPRQWKVDJR8QGHU1HZ
York Trust Law, every sale, conveyance or other act of the trustee in contravention of the
trust is void. EPTL 7-2.4. Therefore, the acceptance of the note and mortgage by the
WUXVWHHDIWHUWKHGDWHWKHWUXVWFORVHGZRXOGEHYRLGWells F argo Bank, N.A. v.
Erobobo (Apr. 29, 2013) 39 Misc.3d 1220(A), 2013 WL 1831799, slip opn. p. 8; see
Levitin & Twomey, Mortgage Servicing, supra, 28 Yale J. on Reg. at p. 14, fn. 35 [under
New York law, any transfer to the trust in contravention of the trust documents is void].)
Relying on EroboboDEDQNUXSWF\FRXUWUHFHQWO\FRQFOXGHGWKDWXQGHU1HZ<RUNODZ
DVVLJQPHQWRIWKH6DOGLYDUV1RWHDIWHUWKHVWDUWXSGD\Ls void ab initio. As such, none
21
RIWKH6DOGLYDUVFODLPVZLOOEHGLVPLVVHGIRUODFNRIVWDQGLQJ In re Saldivar
(Bankr.S.D.Tex., Jun. 5, 2013, No. 11-10689) 2013 WL 2452699, at p. *4.)
:HFRQFOXGHWKDW*ODVNLVIDFWXDODOOHJDWLRQVUHJDUGLQJSRVW-closing date attempts
to transfer his deed of trust into the WaMu Securitized Trust are sufficient to state a basis
for concluding the attempted transfers were void. As a result, Glaski has a stated
cognizable claim for wrongful foreclosure under the theory that the entity invoking the
power of sale (i.e., Bank of America in its capacity as trustee for the WaMu Securitized
Trust) was not the holder of the Glaski deed of trust.16
We are aware that that some federal district courts sitting in California have
rejected the post-closing date theory of invalidity on the grounds that the borrower does
not have standing to challenge an assignment between two other parties. ( Aniel v. GMAC
Mortgage, LLC (N.D.Cal., Nov. 2, 2012, No. C 12-04201 SBA) 2012 WL 5389706
[joining courts that held borrowers lack standing to assert the loan transfer occurred
outside the temporal bounds prescribed by the pooling and servicing agreement];
Almutarreb v. Bank of New York Trust Co., N.A. (N.D.Cal., Sept. 24, 2012, No. C 1216
Because Glaski has stated a claim for relief in his wrongful foreclosure action,
we need not address his alternate theory that the foreclosure was void because it was
implemented by forged documents. ( Genesis Environmental Services v. San Joaquin
Valley Unified Air Pollution Control Dist. (2003) 113 Cal.App.4th 597, 603 [appellate
inquiry ends and reversal is required once court determines a cause of action was stated
under any legal theory].) We note, however, that California law provides that ratification
generally is an affirmative defense and must be specially pleaded by the party asserting it.
(See Reina v. Erassarret (1949) 90 Cal.App.2d 418, 424 [ratification is an affirmative
defense and the defendant ordinarily bears the burden of proof]; 49A Cal.Jur.3d (2010)
Pleading, 186, p. 319 [defenses that must be specially pleaded include waiver, estoppel
DQGUDWLILFDWLRQ@$OVR>Z@KHWKer there has been ratification of a forged signature is
RUGLQDULO\DTXHVWLRQRIIDFW Common Wealth Ins. Systems, Inc. v. Kersten (1974) 40
Cal.App.3d 1014, 1026; see Brock v. Yale Mortg. Corp. (Ga. 2010) 700 S.E.2d 583, 588
[ratification may be expresVHGRULPSOLHGIURPDFWVRISULQFLSDODQGLVXVXDOO\DIDFW
TXHVWLRQIRUWKHMXU\ZLIHKDGIRUJHGKXVEDQGVVLJQDWXUHRQTXLWFODLPGHHG@
22
3061 EMC) 2012 WL 4371410.) These cases are not persuasive because they do not
address the principle that a borrower may challenge an assignment that is void and they
do not apply New York trust law to the operation of the securitized trusts in question.
E.
Application of Gomes
7KHQH[WTXHVWLRQZHDGGUHVVLVZKHWKHU*ODVNLVZURQJIXOIRUHFORVXUHFODLPLV
precluded by the principles set forth in Gomes, supra, 192 Cal.App.4th 1149, a case
relied upon by the trial court in sustaining the demurrer. Gomes was a pre-foreclosure
action brought by a borrower against the lender, trustee under a deed and trust, and
MERS, a national electronic registry that tracks the transfer of ownership interests and
servicing rights in mortgage loans in the secondary mortgage market. ( Id. at p. 1151.)
The subject trust deed identified MERS as a nominee for the lender and that MERS is the
beneficiary under the trust deed. After initiation of a nonjudicial forclosure, borrower
sued for wrongful initiation of foreclosure, alleging that the current owner of the note did
not authorize MERS, the nominee, to proceed with the foreclosure. The appellate court
KHOGWKDW&DOLIRUQLDVQRQMXGLFLDOIRUHFORVXUHV\VWHPRXWOLQHGLQ&LYLO&RGHVHFWLRQV
WKURXJKNLVDFRPSUHKHQVLYHIUDPHZRUNIRU the regulation of a nonjudicial
IRUHFORVXUHVDOHWKDWGLGQRWDOORZIRUDFKDOOHQJHWRWKHDXWKRULW\RIWKHSHUVRQ
initiating the foreclosure. ( Gomes, supra, at p. 1154.)
In Naranjo v. SBMC Mortgage (S.D.Cal., Jul. 24, 2012, No. 11-CV-2229L(WVG)) 2012 WL 3030370 ( Naranjo), the district court addressed the scope of Gomes,
stating:
,Q Gomes, the California Court of Appeal held that a plaintiff does not
KDYHDULJKWWREULQJDQDFWLRQWRGHWHUPLQHWKHQRPLQHHVDXWKRUL]DWLRQWR
proceed with a nonjudicial foreclosure on behalf of a noteholder.
[Citation.] The nominee in Gomes was MERS. [Citation.] Here, Plaintiff
is not seeking such a determination. The role of the nominee is not central
to this action as it was in Gomes. Rather, Plaintiff alleges that the transfer
of rights to the WAMU Trust is improper, thus Defendants consequently
23
lack the legal right to either collect on the debt or enforce the underlying
VHFXULW\LQWHUHVW Naranjo, supra, 2012 WL 3030370, at p. *3.)
Thus, the court in Naranjo did not interpret Gomes as barring a claim that was
essentially the same as the post-closing date claim Glaski is asserting in this case.
Furthermore, the limited nature of the holding in Gomes is demonstrated by the
Gomes FRXUWVGLVFXVVLRQRIWKUHe federal cases relied upon by Mr. Gomes. The court
stated that the federal cases were not on point because none recognized a cause of action
UHTXLULQJWKHQRWHKROGHUVQRPLQHHWRSURYHLWVDXWKRULW\WRLQLWLDWHDIRUHFORVXUH
proceeding. ( Gomes, supra, 192 Cal.App.4th at p. 1155.) The Gomes court described
RQHRIWKHIHGHUDOFDVHVE\VWDWLQJWKDWWKHSODLQWLIIDOOHJHGZURQJIXOIRUHFORVXUHRQWKH
ground that assignments of the deed of trust had been improperly backdated, and thus the
wrong party had initiated the foreclosure process. [Citaiton.] No such infirmity is
DOOHJHGKHUHIbid.; see Lester v. J.P. Morgan Chase Bank (N.D.Cal., Feb. 20, 2013)
___ F.Supp.2d____, [2013 WL 633333, p. *7] [concluding Gomes did not preclude the
plaintiff from challHQJLQJ-30RUJDQVDXWKRULW\WRIRUHFORVH@7KH Gomes court also
VWDWHGLWZDVVLJQLILFDQWWKDWLQHDFKRIWKHWKUHHIHGHUDOFDVHVWKHSODLQWLIIVFRPSODLQW
identified a specific factual basis for alleging that the foreclosure was not initiated by the
FRUUHFWSDUW\ Gomes, supra, at p. 1156.)
The instant case is distinguishable from Gomes on at least two grounds. First, like
Naranjo, Glaski has alleged that the entity claiming to be the noteholder was not the true
owner of the note. In contrast, the principle set forth in Gomes concerns the authority of
the QRWHKROGHUVQRPLQHH, MERS. Second, Glaski has alleged specific grounds for his
theory that the foreclosure was not conducted at the direction of the correct party.
In view of the limiting statements included in the Gomes opinion, we do not
interpret it as barring claims that challenge a foreclosure based on specific allegations
that an attempt to transfer the deed of trust was void. Our interpretation, which allows
borrowers to pursue questions regarding the chain of ownership, is compatible with
24
Herrera v. Deutsche Bank National Trust Co. , supra, 196 Cal.App.4th 1366. In that case,
the court concluded that triable issues of material fact existed regarding alleged breaks in
the chain of ownership of the deed of trust in question. ( Id. at p. 1378.) Those triable
LVVXHVH[LVWHGEHFDXVH'HXWVFKH%DQNVPRWLRQIRUVXPPDU\MXGJPHQWIDLOHGWRHVWDEOLVK
it was the beneficiary under that deed of trust. ( Ibid.)
F.
Tender
damages,17 and (3) the tender rule is a principle of equity and its application should not
be decided against him at the pleading stage.
Tender is not required where the foreclosure sale is void, rather than voidable,
such as when a plaintiff proves that the entity lacked the authority to foreclose on the
property. ( Lester v. J.P. Morgan Chase Bank , supra, ___ F.Supp.2d____, [2013 WL
633333, p. *8]; 4 Miller & Starr, Cal. Real Estate (3d ed. 2003) Deeds of Trust, 10:212,
p. 686.)
17
Onofrio v. Rice (1997) 55 Cal.App.4th 413, 424 [tender may not be required where it
would be inequitable to do so].)
G.
5HPHG\RI6HWWLQJ$VLGH7UXVWHHV6DOH
Defendants argue that the allegedly ineffective transfer to the WaMu Securitized
Trust was a mistake that occurred outside the confines of the statutory nonjudicial
foreclosure proceeding and, pursuant to Nguyen v. Calhoun (2003) 105 Cal.App.4th 428,
WKDWPLVWDNHGRHVQRWSURYLGHDEDVLVIRULQYDOLGDWLQJWKHWUXVWHHVVDOH
First, this argument does not negate the possibility that other types of relief, such
as damages, are available to Glaski. (See generally, Annot., Recognition of Action for
%DVHGRQWKHIRUHJRLQJZHFRQFOXGHWKDW*ODVNLVIRXUWKFDXVHRIDFWLRQKDV
stated a claim for wrongful foreclosure. It follows that Glaski also has stated claims for
quiet title (third cause of action), declaratory relief (fifth cause of action), cancellation of
instruments (eighth cause of action), and unfair business practices under Business and
Professions Code section 17200 (ninth cause of action). (See Susilo v. Wells F argo Bank,
26
JUDICIAL NOTICE
A.
*ODVNLV5HTXHVWIRU-XGLFLDO1RWLFH
When Glaski filed his opening brief, he also filed a request for judicial notice of
(1) a Consent Judgment entered on April 4, 2012, by the United States District Court of
the District of Columbia in United States v. Bank of America Corp. (D.D.C. No. 12-CV00361); (2) the Settlement Term Sheet attached to the Consent Judgment; and (3) the
federal and state release documents attached to the Consent Judgment as Exhibits F and
G.
Defendants opposed the request for judicial notice on the ground that the request
violated the requirements in California Rules of Court, rule 8.252 because it was not filed
with a separate proposed order, did not state why the matter to be noticed was relevant to
the appeal, and did not state whether the matters were submitted to the trial court and, if
so, whether that court took judicial notice of the matters.
7KHGRFXPHQWVLQFOXGHGLQ*ODVNLVUHTXHVWIRUMXGLFLDOQRWLFHPD\SURYLGH
background information and insight into robo-signing18 and other problems that the
lending industry has had with the procedures used to foreclose on defaulted mortgages.
However, these documents do not directly affect whether the allegations in the SAC are
VXIILFLHQWWRVWDWHDFDXVHRIDFWLRQ7KHUHIRUHZHGHQ\*ODVNLVUHTXHVWIRUMXGLFLDO
notice.
18
B.
'HIHQGDQWV5HTXHVWIRU-XGLFLDO1RWLFHRI$VVLJQPHQW
7KH$66,*10(172)'(('2)75867UHFRUGHGRQ'HFHPEHUWKDW
stated JP Morgan transferred and assigned all beneficial interest under the Glaski deed of
WUXVWWR/D6DOOH%DQN1$DVWUXVWHHIRU:D0X>6HFXULWL]HG7UXVW@WRJHWKHUZLWKWKH
note described in and secured by the Glaski deed of trust was not attached to the SAC as
DQH[KLELW7KDWGRFXPHQWLVSDUWRIWKHDSSHOODWHUHFRUGEHFDXVHWKHUHVSRQGHQWV
DSSHQGL[LQFOXGHVDFRS\RIGHIHQGDQWVUHTXHVWIRUMXGLFLDOQRWLFHWKDWZDVILOHGLQ-XQH
2011 to support a motion for judgment on the pleadings.
,QUXOLQJRQGHIHQGDQWVUHTXHVWIRUMXGLFLDOQRWLFHWKHWULDOFRXUWVWDWHGWKDWLW
could only take judicial notice that certain documents in the request, including the
assignment of deed of trust, had been recorded, but it could not take judicial notice of
factual matters stated in those documents. This ruling is correct and unchallenged on
appeal. Therefore, like the trial court, we will take judicial notice of the existence and
recordation of the December DVVLJQPHQWEXWZHGRQRWWDNHQRWLFHRIWKHWUXWKRI
PDWWHUVVWDWHGWKHUHLQ Herrera v. Deutsche Bank National Trust Co., supra, 196
Cal.App.4th at p. 1375.) As a result, the assignment of deed of trust does not establish
that JP Morgan was, in fact, the holder of the beneficial interest in the Glaski deed of
trust that the assignment states was transferred to LaSalle Bank. Similarly, it does not
establish that LaSalle Bank in fact became the owner or holder of that beneficial interest.
Because the document does not establish these facts for purposes of this demurrer,
it does not cure either of the breaks in the two alternate chains of ownership challenged in
the SAC. Therefore, the December 2008 assignment does not provide a basis for
sustaining the demurrer.
28
D ISP OSI T I O N
The judgment of dismissal is reversed. The trial court is directed to vacate its
order sustaining the general demurrer and to enter a new order overruling that demurrer
as to the third, fourth, fifth, eighth and ninth causes of action.
*ODVNLVUHTXHVWIRUMXGLFLDOQRWLFHILOHGRQ6HSWHPEHULVGHQLHG
Glaski shall recover his costs on appeal.
_____________________
Franson, J.
WE CONCUR:
_____________________
Wiseman, Acting P.J.
_____________________
Kane, J.
29
C E R T I F I E D F O R PU B L I C A T I O N
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
THOMAS A. GLASKI,
F064556
Plaintiff and Appellant,
(Super. Ct. No. 09CECG03601)
v.
As the nonpublished opinion filed on July 31, 2013, in the above entitled matter
hereby meets the standards for publication specified in the California Rules of Court, rule
8.1105(c), it is ordered that the opinion be certified for publication in the Official
Reports.
_______________________
FRANSON, J.
I CONCUR:
_____________________
KANE, J.
30